I've since gotten basic UpdatePanel examples to work, proving that it's not a configuration problem on my part, but only when they're as trivial and useless as the examples on the Microsoft's website. Everything that I've tried with real-world complex code doesn't work consistently, if at all, without generating full-page post-backs.
One of the simplest examples I can site is a user control referenced within an update panel, and the user control is dynamicly adding asp:Button controls to the page. The click events of those controls always generate full-page post-backs from what I've seen. This is just one of several examples I've ran into.
I'm not trying to be a pessimist here. I really want Atlas to work, but I've had our own Ajax framework implmentation with asynch panels in our application for a year now and had less problems with it than with Atlas so far. I was really enthusiastic after all the hype, but the more I see of it, especially in the beta 2 stage now, the less impressed I am with it.